The Effect of Social Media Information on Intention to Invest in Indonesia Capital Market: Case of Generation Y

The use of social media in Indonesia has increased rapidly throughout the years. The social media user’s age is in line with the demographic characteristics of capital market investors, which have shifted to the younger generation. The study strive to explain the effect of social media as source of information for investment intention reference of prospective young individual investors in Indonesia. The study applies the Theory of Planned Behavior (TPB) and Information Adoption Model (IAM). Online survey from 598 respondent is used as the primary data for this study. Using the Structural Equation Model, the analysis shows that financial self-efficacy simultaneously mediates and moderates the relation of the independent and the dependent variables. In addition, investor’s perception of risk was among the most influential dependent variable. The study emphasizes the importance of managing social media for the financial service providers to increase Generation Y’s intention in the stock market investment.